More than 300 shore-based members of the Marine Engineers Beneficial Association will share $1.8 million in compensation for benefits they lost when their former employer, United States Lines Inc., went bankrupt two years ago.
In a settlement hammered out in private negotiations between USL and the union, each of some 302 office employees will receive an average of nearly $5,000 each, subject to final approval by the bankruptcy court. In addition, 23 port engineers will be paid in full for lost vacation and compensatory time, according to a MEBA statement.The settlement has been submitted to the U.S. Bankruptcy Court for the Southern District of New York, and a hearing on the proposal has been scheduled for Dec. 19.
This newest development in the USL bankruptcy case follows a similar settlement with former employees who were not members of the union. Both settlements are part of an effort to wrap up the bankruptcy case entirely.
Alan Gropper, an attorney for the committee that represents USL's unsecured creditors, said, Our hope is to have the plan of reorganization confirmed by February or March. Such a confirmation would mark an end to the active phase of the bankruptcy proceedings, he said.
The settlement is a very satisfactory solution to a difficult problem, said C.E. Gene DeFries, president of MEBA District 1/National Maritime Union, in a written statement announcing the settlement.
The agreement, which was reached in late September, provides that 302 office employees of the bankrupt shipping company will receive a total of $1,500,000. The individual employee will receive an average of $4,967, which is 49.45 percent of the original claim. Each individual's payment will be based on his or her years of service, the union leader said.
Mr. DeFries compared the 49 cents on the dollar settlement with an earlier settlement reached between USL and non-union employees. The non-union settlement, approved by the bankruptcy court Monday, gave workers 24 cents on the dollar for their severance and vacation pay claims.
This most recent settlement is not related to claims against the company by the MEBA pension trust or by the National Maritime Union, another labor group that merged with MEBA in the aftermath of the USL bankruptcy.